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President Muhammadu Buhari got his undeserved, unmerited second term. In tow, Godwin Emefiele, central bank governor, got his too! Both failed woefully in the management of the economy in their first terms and would not have qualified for a second term in meritocratic climes. But Nigerians rewarded Buhari’s poor first-term performance with a re-election; in turn, Buhari rewarded Emefiele’s first-term underachievement by reappointing him for another term of five years.
Of course, Buhari reappointed Emefiele because he pursued, almost without reservation, the president’s statist and illiberal economic agenda, including: propping up favoured sectors, notably agriculture and manufacturing, with billions of naira; protecting these sectors from international competition through high tariffs, exchange control and outright import bans; feeding Buhari’s deficit-financing by extending massive overdrafts to his government; and, of course, like Buhari, not wanting to “kill the naira”; so, instead of liberalising the foreign exchange market and allow the naira to adjust to its true market-determined level, he is operating different foreign exchange windows that foster different exchange rates, which distort the economy and discourage foreign investors.
Surely, if the consensus is, as it is, that President Buhari failed economically in his first term – and the evidence of appalling performances across all economic indicators proves this – then Emefiele cannot insulate himself from that failure because he was the enthusiastic driver of all the policies behind it. Indeed, he has led the central bank like the omniscient head of Gosplan, the state committee that ran the Soviet Union’s planned economy.
To be sure, Emefiele is the most powerful central bank governor in Nigeria’s recent history. Over the past four years, he has been the central bank governor, the de facto finance minister and the de facto coordinating minister of the economy, all rolled into one! When … Read More...